A dispute between the partners of URU Metals Ltd has held up progress at its South African nickel project but URU is about to add a new project to its portfolio.
URU has looked at 30-40 projects which are have an identified resource which can be progressed to production but have run out of money. URU is seeking something, which with minimal investment, can become a mid-stage project. A stable mining country will be targeted but no specific metal is favoured. A deal is being negotiated.
The Zebediela nickel project could become one of the top ten nickel mines in the world. An assessment indicates a valuation of $1bn for part of the project and there could be additional value from a magnetite resource. A further $8.5m has to be spent to get to the pre-feasibility stage, while capital expenditure of $708m will be required to create the mine. URU owns 45% of the joint venture. Umnex with 15% and Southern African Nickel with 40% are in dispute relating to a proposed TSX listing for the project. The dispute is going to arbitration but it could take some months to settle. So, for the time being, the project is on hold. The value in the URU balance sheet has not been written down.
URU retains two uranium prospecting licences in Niger but they are not a current priority and their value has been written down from $4.71m to nil.
There was a $1.28m cash outflow in the six months to September 2012. URU still has $2.77m in the bank. There is enough money for investment in a new project but more cash would be useful to help develop it.
At 2.38p a share, URU is valued at £2.69m. Even after the write-down, the NAV was $6.62m at the end of September 2012.
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